How to get the most from your Net Promoter Score (NPS)

The customer loyalty measurement, Net Promoter Score (NPS), has been a popular tool for customer satisfaction since its creation in 1993. As business moves into a new era post-pandemic, join me to explore the value NPS can offer your business by sharing how it is pivotal to enable Phocas to drive product development and stronger communication.

What is the Net Promoter Score?

Net Promoter Score (NPS) is a measure of brand loyalty that goes beyond finding happy or satisfied customers to identify those who are truly loyal to a brand.

NPS was created in 1993 by Fred Reichheld and later adopted in 2003 by Bain & Company and Satmetrix. The method remains a powerful tool to measure current customer loyalty and predict the likelihood of future actions, both positive and negative.

How does NPS work?

The simplicity and continued success of the NPS survey is due to the extensive research that Reichheld, Bain & Company and Satmetrix carried out to measure which questions posed to customers best-predicted business profitability in the long run. 

The research showed that the question that was best at predicting long term business profitability was:

'How likely are you to recommend [company X] to friends or colleagues?'

Answers are given on a scale of 0 - 10 with scores categorised as:

0-6 Detractor – unhappy customers with the potential to damage your brand, obstruct growth and drive negative word-of-mouth 

7-8 Passive - may be satisfied overall but are not dedicated to your brand offering. May be susceptible to approaches from competitors

9-10 Promoter – happy customers that proactively share their positive experiences. Likely to increase wallet share, promote your brand, make direct recommendations to their contacts. 

How to calculate your NPS?

The score is calculated by subtracting the % of detractors from the % of promotors so scores can run from -100 to +100.  

For example:

• 10 responses

• 4 promoters (40%)
• 4 passives (40%)
• 2 detractors (20%)
• NPS = 40 - 20 = 20

NPS best practice

When you send your NPS survey will depend upon your business, your customers and where they are in their customer journey. 

Finding the right time in a customer’s journey to collect results that can be compared and used to benchmark score changes is key. The only way to find that sweet spot is to test, test and test again. 

Try to avoid sending your NPS at business-critical pinch points such as end of year, expected seasonal busy periods, or times of expected high out of office responses, to increase your chances of a high response rate.

1. Get your timing right

When you send your NPS survey will depend upon your business, your customers and where they are in their customer journey. 

Finding the right time in a customer’s journey to collect results that can be compared and used to benchmark score changes is key. The only way to find that sweet spot is to test, test and test again. 

Try to avoid sending your NPS at business-critical pinch points such as end of year, expected seasonal busy periods, or times of expected high out of office responses, to increase your chances of a high response rate.

2. Get your frequency right

How often you check in with your customers to update (and improve we hope!) your NPS may be driven by your business resource availability rather than the ideal cadence of an equally spaced iteration throughout a year.  

However, a customer’s sentiment about your brand and product can quickly change due to a whole range of factors, both in and outside of your control. Therefore, choosing a time that will deliver results less affected by extreme circumstances is advised if business innovation and growth planning is going to draw from the NPS feedback.

The standard frequency for running your NPS is once a year. I would recommend running your NPS at a similar point every year to ensure data collected is easily compared and any actions you have taken in-between surveys can be measured and compared.

Due to the increased rate of market change, at Phocas UK we have increased an annual NPS to a bi-annual NPS. This increase in feedback is enabling faster reactions to customer satisfaction shifts, address any issues, and deliver outstanding service.

3. Remember the feedback belongs to everyone

Good or bad, the results of your NPS are the culmination of every element of your brand. As such, you should celebrate or commiserate with the whole team when the final scores are in. Everyone has their role to play in delivering an exceptional customer experience so everyone should be part of the conversation on how to learn and improve.

Don’t forget that this doesn’t just mean your internal stakeholders. Celebrate great results with your promoters whilst being transparent with your customers about how you plan to improve further. 

4. Follow-up

Your NPS results are just the starting point. Thank your promoters for their positive scores and ask for their referrals, and don’t shy away from contacting customers who are unhappy. Reach out and get the story behind the score as quickly as possible. Don’t miss your chance to continue the conversation and learn how to improve and deliver the experience your customer wants. 

How does Phocas measure up?

It’s no secret that I am a big fan of NPS, but I am a bigger fan of being proactive and delighting Phocas customers. As such, I have been very proud of the results the UK Phocas team have achieved over recent years, but I am always keen to push and improve our score year on year.

Our latest results have seen an exceptional third consecutive rise to a score of 42. When benchmarked to similar software businesses who score 28-34, that puts us a significant step ahead of the competition. 

Not only has the NPS increased, but the ongoing testing of timing, frequency, customer journey stage, timely follow up has aided a 100% increase in NPS survey participants in the most recent survey. 

1. How did we use the NPS information?

The resulting follow-up campaign to our promoters delivered a 40% rise in product reviews of Phocas (via review site G2 in this instance in the UK) thanks in part to the increase in survey responses. Successfully leveraging the positive intent of promoters to drive new business and growth.

Detailed feedback received as part of direct feedback to NPS submissions (detractor, passive and promoter scores) was grouped by theme and is now forming the foundation of how we prioritise our product roadmap and shape our communications to better serve our customers.

2. NPS value

I will be the first to admit that we haven’t scratched the surface of the possible value data collected from our regular NPS survey provides. As the team at Phocas UK continue to review and react to the insights delivered by a cycle of customer feedback only one thing is certain – if we listen and share our expertise, we can affect positive change.

Explore how NPS can work in your business with the links below, or to continue the discussion, leave a reply via the form below.   

www.netpromotersystem.com

The Ultimate Question 2.0 (Revised and Expanded Edition): How Net Promoter Companies Thrive in a Customer-Driven World | Fred Reichheld

Net Promoter®, NPS®, NPS Prism®, and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld. Net Promoter Score℠ and Net Promoter System℠ are service marks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld.